Mullin, Leo F. 1943–

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Leo F. Mullin
1943–

Chairman, Delta Airlines

Nationality: American.

Born: January 26, 1943, in Maynard, Massachusetts.

Education: Harvard University, AB, 1964; MS, 1965; MBA, 1967.

Family: Son of Leo (high school principal) and Alice (schoolteacher); married Leah Malmberg; children: two.

Career: McKinsey & Company, 1967–1973, associate; 1973–1976, principal; Consolidated Rail Corporation, 1976–1981, senior vice president, strategic planning; First Chicago Corporation, 1981–1984, senior vice president; 1984–1991, executive vice president; American National Bank and Trust Company, 1991–1993, chairman; First Chicago Corporation, 1993–1995, chief operating officer; Unicom/Commonwealth Edison, 1995–1997, vice chairman; Delta Airlines, 1997–1999, chief executive officer; 1999–2004, chairman of the board and chief executive officer; 2004–, chairman of the board.

Address: Delta Airlines, 760 Doug Davis Drive, Atlanta, Georgia 30354; http://www.delta.com.

■ Leo F. Mullin spent nearly 30 years rising through leadership positions within several different fields, including banking and transportation, before becoming the chief executive officer of Delta Airlines in 1997. He turned the company's finances around during his first three years as CEO; however, Delta had to struggle along with the rest of the airline industry following the terrorist attacks on the United States in September 2001. Mullin, who held three degrees from Harvard University, became embroiled in controversy when company documents revealed that he and other executives had been paid large sums of money in the form of cash bonuses and payments to pension plans during a time in which the company was asking its employees to accept wage cuts. Mullin stepped down as CEO of Delta at the end of 2003.

EDUCATION AND EARLY CAREER

Leo Mullin grew up in a sound educational environment in Maynard, a small town in eastern Massachusetts. He was one of eight children born to a high school principal and a schoolteacher. Mullin remained in his home state to attend Harvard University, where he studied engineering as an undergraduate. He completed his bachelor's degree in 1964, followed by a master's degree in applied physics and applied mathematics in 1965. Mullin remained at Harvard, receiving a master's degree in business administration from the Harvard Business School in 1967.

Mullin was hired as an associate at McKinsey & Company, a financial consulting service in Washington, D.C., in 1967 and remained with the company for nine years. He was promoted to principal or partner of the firm in 1973 and continued working for McKinsey until 1976. Mullin had his first experience in the transportation industry when he became senior vice president for strategic planning at the Consolidated Rail Corporation (Conrail) in Philadelphia in 1976.

Mullin continued his rise into the ranks of upper management in 1981 when he was hired as the senior vice president of the First Chicago Corporation, the tenth largest bank in the United States. He was later promoted to executive vice president in 1984 and remained in that position until 1991. Between 1991 and 1993, Mullin served as the chairman of the American National Bank and Trust Company in Chicago, a subdivision of First Chicago. His rise through the company culminated in his appointment as the bank's president and chief operating officer in 1993. In 1995 Mullin transferred to Unicom and its subsidiary, Commonwealth Edison, as the Chicago company's vice chairman. Mullin joined Unicom at a time when the utility company had had to adjust to industry deregulation.

AN OUTSIDER CEO

Mullin's next position represented a surprising change for the company that hired him. Until 1997 Delta Airlines had never hired a chief executive officer who had not risen through the company's own ranks. Delta had, however, experienced several crises in the course of the 1990s. During the early part of the decade, the company struggled with a series of financial problems caused by expensive expansion projects. The problems in turn forced the CEO at that time, Ron Allen, to make deep cutbacks. Although Delta had made some financial gains under Allen's direction, its internal morale and customer service had suffered. After several clashes with the company's board, Allen was forced out as CEO.

Delta looked outside its own management when it hired Mullin after a three-month search. Although Mullin had had no experience in managing airlines when he took over as CEO in August 1997, he did not regard his inexperience as a disadvantage. He referred to himself at the time as a "student of companies" (Atlanta Journal-Constitution, August 16, 1997). Mullin promised to restore a balance between improving Delta's financial situation and dealing with other important factors, including customer service and relations with employees.

Mullin gained the respect of observers in his first few months with Delta as a result of his open and earnest leadership style. Delta's stock prices climbed during its first year under Mullin's direction. Delta announced its first billion-dollar profit in 1998, and the company's stock price rose to an all-time high of $143 per share. Customer service also improved during Mullin's first year as CEO.

Mullin added the title of chairman of the board to his resume in 1999, but some long-standing problems resurfaced. The company began negotiations with its pilots' union in September 1999. During a meeting in October, the pilots raised a number of concerns regarding the company's dealings with its personnel. Although Delta's pilots were paid the highest salaries in the industry, they felt considerable animosity toward the company's management as a result of deep cutbacks experienced during the early 1990s.

A LEADER IN CRISIS

Delta's profitable run under Mullin ended in 2000 and 2001, as labor costs and fuel prices both escalated. Delta reached an agreement with the pilots' union in June 2001 that provided for a 24–39-percent increase in the pilots' pay. The contract was expected to cost the company $2.5 billion. Delta's profits continued to slide.

The next crisis occurred less than three months later, when the terrorist attacks on the United States on September 11, 2001 crippled the airline industry. All civilian airplanes were grounded for several days after the attack. The interruption in service cost the industry an estimated $120 million per day. Although none of the planes that were hijacked by the terrorists belonged to Delta, the disaster affected all the major airlines.

Within weeks of the terrorist attacks, however, Mullin emerged as an industry spokesperson. He addressed congressional committees on several occasions, requesting federal aid for the airlines and asking Congress to approve mergers between airlines. Thanks to Mullin—who was considered the appropriate industry executive to speak because he "has the ability to communicate that some others don't"—Congress agreed to rescue the ailing airlines (Los Angeles Times, September 21, 2001).

CONTROVERSY OVER SALARY

Delta shared the ongoing financial problems that affected all the major carriers following the September 11 attacks. The company sought concessions from the pilots' union, asking the pilots to accept significant pay cuts. The pilots stood firm. As many as 16,000 Delta employees were laid off between the early part of 2001 and the end of 2003, resulting in a sharp drop in employee morale. The first wave of staff reductions were the result of voluntary retirements and buyouts that took place after the company announced potential layoffs. Flight attendants were the group most heavily affected in 2002 and early 2003, although the cuts affected just about every job category in the company.

Although Mullin retained his position as an industry leader through 2002, his reputation was tarnished when reports revealed that Delta had paid as much as $43 million to its executives in the form of cash bonuses and payments to executive pension funds. These pension funds could not be touched in the event that the airline was forced to declare bankruptcy.

Delta's performance rating declined in 2003 along with employee morale and customer satisfaction. Mullin was unable to win concessions from the pilots' union even though Delta tried to cut the pilots' compensation by as much as 31 percent. Amid the turmoil, Mullin abruptly announced his retirement as CEO of Delta in November 2003. He remained as the company's chairman for part of 2004. Although Mullin claimed that the timing of his retirement came at a "perfect break point," analysts assumed that the move was necessary because the pilots were unlikely to agree to wage cuts as long as Mullin remained at the head of the company (Washington Post, November 25, 2003).

Apart from Mullin's duties at Delta, he was widely known for his involvement with civic and business organizations, including the Museum of Natural History in Chicago, the Chicago Chamber of Commerce, and the Chicago Urban League.

See also entries on Commonwealth Edison, Consolidated Rail Corporation, Delta Air Lines, Inc., and First Chicago Corporation in International Directory of Company Histories.